Thursday, 7 March 2019

Ceisteanna (11)

Michael Moynihan

Ceist:

11. Deputy Michael Moynihan asked the Minister for Business, Enterprise and Innovation the discussions she has had with her EU counterparts regarding the possible 55,000 job losses Ireland will face if there is a hard Brexit; and the supports and advice that have been provided. [9386/19]

Amharc ar fhreagra

Freagraí ó Béal (4 píosaí cainte) (Ceist ar Business)

What discussions has the Minister had with her EU counterparts in light of Brexit and the indication that 55,000 jobs could be in jeopardy? What support and advice have been coming from our EU counterparts in different countries on the job losses that could occur, particularly in the agrifood industry?

I understand that the ESRI and Department of Finance are completing a more comprehensive assessment of the impact of Brexit on Ireland and these results are expected to be published later in March. I suspect that the jobs figure to which the Deputy refers is based on preliminary analysis undertaken by the ESRI and the Department of Finance which takes account of recently published UK impact assessments. However, I should point out that the analysis does not suggest that 55,000 jobs will be lost, but rather that employment growth will be slower than otherwise would be the case in the absence of Brexit. Nevertheless, and reflecting our still growing economy, total employment is expected to increase by around 178,000 by 2023.

In February 2018, my Department published the Copenhagen Economics report which examined the strategic implications arising for Ireland from changing EU-UK trading relations. While all scenarios examined produce a result that is less favourable than a non-Brexit scenario, the Irish economy is still expected to record strong and positive growth out to 2030. This report also highlighted a range of employment challenges, with employment shifts occurring from vulnerable agricultural and traditional manufacturing sectors towards a range of services sectors likely to experience job growth. The analysis also highlighted the disproportionate impact of Brexit on the regions.

This analysis was conducted on the basis of no policy change, that is, if no mitigation measures were taken by Government or by firms. In reality, of course, extensive work to prepare for the UK’s exit, including for a hard Brexit scenario, has been undertaken in my Department, across Government and throughout the enterprise sector. Over the course of the last three budgets I have introduced through the enterprise agencies an extensive suite of enterprise supports to assist firms to meet the challenges presented by Brexit. They range from liquidity support through short-term and long-term loans, to restructuring aid for businesses in severe operating difficulties. The majority of enterprise supports are open to all companies, including SMEs, and not just those that are clients of the enterprise agencies.

The ESRI and the Department of Finance are compiling a report which is going to be issued later in the month of March. Today is 7 March. We are within three weeks of Brexit. It is two and a half years since the vote was taken in the UK on Brexit. We are to accept that the Department of Finance and the ESRI are going to issue a report in March 2019. That frightens us because we have known the implications and challenges of Brexit. The Minister is quite right in what she has said about the regions because there are major challenges, not just in the agrifood industry but in the many companies that export to the UK. The management of many of the companies whom I talk to daily would say that the Government, the ESRI and the Department of Finance do not seem to be up to speed with it or treating it with any urgency. I have to challenge the Minister. Does she accept that March 2019 is not the appropriate time for the ESRI and Department of Finance report to be coming out and that it should have been done months, if not a year, ago?

Numerous reports have been compiled, but we have been acting on the information contained in the Copenhagen report which was compiled last year. The Deputy is right when he refers to exposed sectors that are vulnerable to Brexit. We have raised this issue with the Commissioner. We are working with businesses to overcome the difficulties of this possible shock. When I met Commissioner Vestager in January, the focus of our meeting centred on the severe challenges Irish businesses, especially SMEs, would face when the United Kingdom left the European Union. The Commissioner emphasised that the Commission stood ready to act urgently to mitigate the impact of Brexit on Irish firms. We recently received state aid approval for Carbery Food Ingredients Limited to help the company to finance a €65 million diversification project to mitigate the impact of Brexit. I know that the Deputy is very familiar with this good company which is going through a significant transformation as it moves away from the UK market. It is changing much of its produce from cheddar cheese to mozzarella as it targets the Asian market. The test case demonstrates what we want to do for the food sector. The dairy industry which has been working extremely closely with the Government has announced investment of between €700 million and €800 million.

Written Answers are published on the Oireachtas website.